AEG is ending its six-year partnership with StubHub, replacing the ticketing resale site with its own AXS ticketing system, which will combine primary ticket inventory with secondary inventory in a unified shopping experience.
“We’re really pushing hard for identity-based ticketing,” said Tom Andrus, chief operating officer for AXS, who said the decision to end their partnership with the eBay-owned ticket site and strike out on their own was made to “improve the ability to know who is in our building and keep most of the revenue in the same ecosystem.”
The deal covers 30 AEG venues in the United States, including Staples Center in Los Angeles, PlayStation Theater in New York, Target Center in Minneapolis, and Fiddler’s Green Amphitheatre and Red Rocks in Denver, as well as the Los Angeles Kings and the LA Galaxy sports franchises. The system is being built through Flash Seats, which was developed by Veritix and merged with AEG in 2015. As part of the agreement, the Flash Seats brand will be phased out for AEG venues, although it’s unclear what happens long-term for sports clients like the Cleveland Cavaliers and Houston Rockets.
The announcement means the end of the ticketing barcode, a technology that made it easy for tickets to be sold over multiple platforms like StubHub and Vivid Seats, but difficult to track customers and was often linked to fraud by scalpers. Replacing the scannable barcode will be a digital QR code that changes every 30 to 45 seconds and sits within the AXS mobile phone app. The technology, called Mobile ID, can’t be screenshot or copied and distributed. By requiring most individuals to have their own mobile phone and AXS app to redeem their ticket, the technology allows AEG to know each individual that’s inside their venue.
That was difficult to do through StubHub — AEG often knew who first purchased the ticket, but they didn’t know who the purchaser resold the ticket to or how many times the ticket had been flipped — “whoever sold the ticket kept the data,” Andrus said.
Mobile ID allows fans to digitally transfer and resell tickets within the app, while providing AEG with a transaction record showing how many times the ticket has been sold and who ultimately is redeeming the ticket at an event.
With barcodes, “we probably know 20-to-35 percent of the people who are in the venue and with Mobile ID, we’ll start getting up more in the 60-to-70 percent range, and hopefully eventually 90-to-100 percent,” Andrus said.
The other big change for AXS will be the rollout of FanSight, a ticketing purchase experience that combines available secondary inventory with primary ticketing inventory for a single view of available tickets. Ticketmaster has been using a similar technology for several years, and StubHub has offered a similar purchase experience for the Philadelphia 76ers.
“I think you’re going to see a long-term benefit which will come from having all the sales and prices information served from a single big dataset,” Andrus said. “It will lead to better pricing and more information flowing back to the rights holders, the teams and artists. It will help venues put together a much better fan experience.”
AXS won’t generally place price caps or floors on what resellers can charge for tickets, although the company will retain the ability to implement pricing rules if needed. Besides giving AEG more control over secondary tickets, it also could mean a great chunk of revenue for the company. Most primary ticketing companies only collect a few dollars on each ticketing transaction, while secondary sites can charge fees equal to 25% percent of the retail price with many analysts believing that secondary ticketing is a $10 billion market in North America.
Ending its agreement with StubHub, means untangling a complex six-year-relationship that saw StubHub deeply embedded within AEG venues, including the Staples Center. StubHub holds the naming rights to the StubHub Center in Carson, California, home of the LA Galaxy. It’s unclear what happens with the soccer stadium, but StubHub will slowly extricate itself from AEG buildings as part of the agreement. In November, a kiosk at LA Live that assisted fans who purchased tickets through StubHub will close.